Alex White (Dublin South, Labour) | Oireachtas source

The section the Deputies seek to have deleted makes a number of changes in preparation for the introduction of a solid fuel carbon tax from 1 May 2013. The section provides for the application of the carbon tax to solid fuels as announced in the budget. It is the last element outstanding in the application of the carbon tax. To alleviate the impact on lower income households, the tax will be applied in two phases - €10 per tonne of CO2 emitted from 1 May 2013 - therefore, it will not take effect until next winter - and a further €10 per tonne of CO2 emitted from 1 May 2014. This brings the carbon tax on solid fuels into line with the tax on all other fossil fuels.

A number of further amendments will be required to clarify the scope of the tax. Any person who first supplies a solid fuel product in the State is an accountable person for the purposes of liability and payment of the tax and any such person must register with the Revenue Commissioners. Where solid fuel is supplied as a raw material for the manufacture of a solid fuel product, the tax will be charged on the first supply of the manufactured product in the State. The section before us comprises part of the revenue raising element of budget 2013 and, accordingly, the proposed amendment must be rejected.

I heard the point made about whether this was truly a carbon tax. I respectfully say to the House that it is a carbon tax and that it is about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. Solid fuels have the highest carbon content of all fossil fuels. As they are considered the dirtiest fuels, it is important from an environmental impact perspective that we tax them.

Deputy Róisín Shortall asked about the extent to which these measures are assessed. I assure her and the House that taxation measures such as this are very carefully considered by the tax strategy group. The impact of taxes and tax changes is very carefully considered by the Government in the context of budgetary measures.

It is important to point out that the fuel allowance payment under the national fuel scheme to assist with home heating, payable to people in receipt of long-term social welfare payments, will continue to be made at €20 per household per week for a 26 week period from October to April. The budget for the fuel allowance in 2013 is estimated at €210 million. Since 2000 over €115 million has been paid in grant support towards 270,000 upgrade measures in 110,000 homes under the better energy, warmer homes scheme. It is acknowledged that the carbon tax on solid fuels will have an impact on households. That is why the Government chose to wait until after the winter period to introduce the tax and introduce it on a phased basis across this year and next. This is a carbon tax which has been directed at a particular end, but it has not been done in a way that is oblivious to the impact on families, particularly, low income families.

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